Developer’s Seminar Brings Fresh Faces
“Proven Track Record” is the new buzzword
By Nancy Conroy

Last week, Mr. Hector Bustamante of the Bustamante Realty Group gave a seminar at Fox Studios entitled “Understanding Baja Real Estate in 2008”. In a fancy auditorium, it was a multimedia presentation discussing the future of Baja real estate development, featuring speakers, slide shows, suits, commentary and buzzwords. To an outsider that is unfamiliar with the Baja real estate scene, the presentation probably looked like a fairly standard developers meeting, similar to something that might happen in the US. But, the very ordinariness of this meeting was actually extraordinary, because this time the organizers had credibility and what they were saying made sense. And that, my friends, means that the local real estate scene has just made an important improvement.

The difference between this seminar and past events that looked similar can be summed up with one of Bustamante’s favorite buzzwords: “Proven Track Record”. That a seller should possess a tangible history of satisfied clients and completed deals is a reasonable standard, in line with the expectations of American buyers. A respectable Baja developer should be fully financed, have completed projects, and provide bank trusts and title insurance to buyers at closing. Even though this is obvious, it is not necessarily the norm in Baja. There are number of very high profile Baja developers that flunk the Proven Track Record test. And, even though they flunk, many of these same individuals sponsor real estate seminars, speak in public forums, give interviews to US media, and are board members of real estate and developers associations. American buyers know that these imposters lack a Proven Track Record, and they are tired of hypocrites. So, when a developer with a good reputation like Bustamante stands up there on the stage and provides leadership, people notice.

People start noticing even more when they listen to what Bustamante and his colleagues are saying. Bustamante explained that the Baja real estate boom of previous years was driven by the overvalued California market and by speculators, who were quick to dump their investments at the first sign of a downturn. He said that 2008 will be a tough year, developers now have cash flow problems, and much of the inventory available is mismatched to the market. In other words, he gave a realistic assessment of the current down market, without hype and puffery. Moreover, the speakers did not hesitate to discuss sewage, water, infrastructure, and crime, and did not sugarcoat the issues. One speaker, Patrick Osio, said that these matters were a “responsibility on the shoulders of developers”, adding sternly “if you don’t do it, you won’t have a market”. On many occasions, Bustamante spoke directly and frankly, saying things like “don’t be an accomplice to those that are not doing things right”. He even flat out mentioned that there were a number of developers who were noticeably absent from his seminar, and he did not appear concerned about that. Overall, Bustamante looked like a trustworthy developer that tells the truth and takes a stand, leadership qualities that are badly needed in this market.

One important impact of the recent boom is that new developers were attracted to Baja, players that Bustamante calls the “Big Boys”. These companies are Mega Turismo Bajamar, Trump, Icon, Bay View Grand, Delphi, and Homex. These are huge corporations with ample financing, Proven Track Records, and higher standards. Bustamante says that these players will change the marketplace. Probably, these out of towners could care less about local Rosarito politics, which means that they are not influenced by the Rosarito Old Guard real estate mob. In fact, the Old Guard mob is their competition, which means that local corruption and treachery may now have a powerful new enemy. That would definitely bring positive change to the market.

Bustamante’s dialogue is compelling and makes sense, but he will have trouble bringing this message to the market. He is at a disadvantage because most of his friends and colleagues are Mexicans. He has no name recognition among Americans, and very few Americans attended the recent seminar. Bustamante does not have US media contacts, which means that less qualified real estate ambassadors are currently dominating the spotlight. Anyone in Rosarito that bears a message of high standards and reform will always encounter opposition from the Old Guard, so he will have to contend with that too. Still, if Bustamante just keeps on doing what he is already doing, he has a good chance at uniting Baja developers and bringing new messages and new faces to the forefront.

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